Quiz 5: P5: Bank Reconciliation Bankrec


Open the file listed. In this problem, we reconcile bank statements and make the necessary adjusting entries. The beginning of the unedited file should look like this: img

Bank Reconciliation Statement: It is the statement that provides the reason or explanations for the differences to be occurred or have been found in bank balance in Bank statement and bank account in the organization or company's books of accounts. Certain examples of the differences likely to occur are: • Checks issued but has not presented in bank. • Bank Charges or service charges or NSF charges • Cash or Checks directly d3eposited in bank account. • Cash in transit etc. BRS are prepared to ensure that the company's books of accounts are correctly recorded with the bank records. It is always a good practice to reconcile your books of account with bank records on a frequent basis. In the open worksheet file, record all outstanding debits and credits to reconcile the bank statement. When all transactions have been completed, the worksheet should look like this: img Once the reconciliation is complete, the adjusted bank balance and the adjusted book balance should equal each other.

When the bank statement is reconciled with what is on the books, your spreadsheet will look like this: img To account for the deductions and additions made by the bank that were not recorded on the books, you must make adjusting entries. • For the note collected, we will need to debit cash for the total of $1,460 and credit notes receivable for the principal of $1,400 and also credit interest revenue for $60. • For the returned check on insufficient funds, we will need to debit accounts receivable and credit cash for the amount listed. • The bank service charge is probably listed under miscellaneous expenses so for this transaction we will debit miscellaneous expense and credit cash for the amount listed. • The company made an error in its calculations by recording a check for $246.60 that was actually $264.60, a difference in $18.00. To remedy this error as a journal entry, we will debit sales for $18 and credit cash for the same amount.

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